Guar Gum has now become one of the cheapest natural hydrocolloids on the market. The second rounds of rains have been good in Rajasthan, Gujarat, Haryana and Punjab; this is great news as most farmers are now expecting a good harvest. This fact coupled with manageable demand has had a positive impact on price.
It is anticipated that supply of Guar seeds will be above average; speculators that were hording stock will now come under pressure to liquidate their seeds due to the current supply levels.
With the lowering of Guar Gum prices, it is anticipated that technical users in industries such as, paper, textile, mining and explosives could return to the market. This is because Guar Gum has become one of the most cost effective, natural hydrocolloids available.
The demand from the food sector has yet to return to pre 2011 levels; where the majority of these users were priced out of the market. We are confident that demand from the food sector will continue to increase as the prices have become more stable.
Demand from the shale gas/oil industry is still low, as mentioned in the previous market reports. The price of crude is still below breakeven for most shale gas/oil fracturing companies; therefore we do not foresee the demand from this industry increasing until prices of crude increase.
Over the next few years we do not anticipate the prices of Guar Gum rising to the levels of 2011-2012. This drop in price means that the large variety of industries that previously used Guar Gum and were priced out of the market, can now re-incorporate Guar into their formulas and processes.